Cryptocurrency in 401ks?Jan 19, 2022
Cryptocurrency is all the rage these days with stories about Bitcoin, Ethereum, and others providing daily fodder for the so-called pundits of tech and financial news. However, for most people, cryptocurrency still resides in the land of the great unknown, and many advisors refer to the crypto market as the "Wild West" of speculative investing.
The idea for assets like Bitcoin to be included in retirement plans was fueled last year when SEC Chairman Gary Gensler commented that the agency will not ban cryptocurrency, but will continue to work with other government agencies on regulations. Mutual fund and ETF providers have since created options for cryptocurrency investing, furthering the question of availability in retirement plan accounts.
Fisher Phillips, one of the largest employer and labor law firms in the country posted an article last September on the issue entitled, 6 Things Employers Need to Know Before Offering Cryptocurrency in 401(k)s. The article lays out the risks and considerations of providing cryptocurrency in 401(k)s.
In order to stay informed, plan fiduciaries may want to research the concept of cryptocurrency in retirement plans. For now, it is still the opinion of Evidence Advisors that there is zero justification for allowing such an immensely speculative asset into 401(k) accounts.
Ask any employee if they would like to be paid in Dogecoin instead of dollars, and the likely response will confirm that cryptocurrency is nowhere near a prudent investment option for long-term retirement planning.
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